"NEW SECTION.  Sec. 1   The legislature finds that it is in the public interest to establish a market for alternative fuels in Washington. By requiring a growing percentage of our fuel supply to be renewable biofuel that meets appropriate fuel quality standards, we will reduce our dependence on imports of foreign oil, improve the health and quality of life for Washingtonians, and stimulate the creation of a new industry that benefits our farmers and rural communities.

NEW SECTION.  Sec. 2   A new section is added to chapter 19.112 RCW to read as follows:
     (1) Special fuel licensees under chapter 82.38 RCW, other than international fuel tax agreement licensees and special fuel distributors, shall provide evidence to the department of licensing that at least two percent of total annual diesel fuel sales are biodiesel fuel sales, when the director determines that feedstock grown in Washington state can satisfy a two-percent requirement, or the date November 30, 2008, has passed.
     (2) Special fuel licensees under chapter 82.38 RCW, other than international fuel tax agreement licensees and special fuel distributors, shall provide evidence to the department of licensing that at least five percent of total annual diesel fuel sales are biodiesel fuel sales, when the director determines that both in-state oil seed crushing capacity and feedstock grown in Washington state can satisfy a three-percent requirement.
     (3) For the purposes of this chapter, "biodiesel fuel" has the meaning provided in RCW 82.29A.135.
     (4) The director and the director of licensing shall adopt rules for enforcing and carrying out the purposes of this section.

NEW SECTION.  Sec. 3   A new section is added to chapter 19.112 RCW to read as follows:
     (1) Beginning December 1, 2008, all gasoline sold or offered for sale in Washington shall contain at least two percent denatured ethanol by volume.
     (2) If the director of ecology determines that ethanol content greater than two percent will not jeopardize continued attainment of the federal clean air act's national ambient air quality standard for ozone pollution in Washington and the director of agriculture determines that sufficient raw materials are available within Washington to support economical production of ethanol at higher levels, the director of agriculture may require by rule that all gasoline sold or offered for sale in Washington shall contain up to a maximum of ten percent of denatured ethanol by volume. The director of agriculture shall allow blenders and retailers six months to meet the new minimum content requirement.
     (3) The director of agriculture shall adopt rules for enforcing and carrying out the purposes of this section.

Sec. 4   RCW 19.112.020 and 1990 c 102 s 3 are each amended to read as follows:
     (1) This chapter shall be administered by the director or his or her authorized agent. ((For the purpose of administering this chapter,))
     (2) The director shall adopt rules for maintaining standards for biodiesel fuel or fuel blended with biodiesel fuel by adopting all or part of the standards set forth in the Annual Book of ASTM Standards and supplements ((thereto, and revisions thereof, are adopted)), amendments, or revisions thereof, all or part of the standards set forth in the National Institute of Standards and Technology (NIST) Handbook 130, Uniform Laws and Regulations in the areas of legal metrology and engine fuel quality rules, and any supplements, amendments, or revisions thereof, together with applicable federal environmental protection agency standards. If a conflict exists between federal environmental protection agency standards, ASTM standards, or ((state)) NIST standards, for purposes of uniformity, federal environmental protection agency standards shall take precedence over ASTM and NIST standards. ((Any state standards adopted must be consistent with federal environmental protection agency standards and ASTM standards not in conflict with federal environmental protection agency standards.)) The department of agriculture shall not exceed ASTM standards for diesel.
     (3) The director may establish a fuel testing laboratory or may contract with a laboratory for testing. The director may also adopt rules on false and misleading advertising, labeling and posting of prices, and the standards for, and identity of, motor fuels. The director shall require fuel pumps offering biodiesel and ethanol blends to be identified by a label stating the percentage of biodiesel or ethanol.

NEW SECTION.  Sec. 5   A new section is added to chapter 19.112 RCW to read as follows:
     The director shall establish a biofuels advisory committee to advise the director on implementing or suspending the minimum renewable fuel content requirements. The committee shall advise the director on applicability to all users; logistical, technical, and economic issues of implementation; and how the use of renewable fuel blends greater than two percent could achieve the goals of this act. The director shall make recommendations to the legislature and the governor on the implementation or suspension of this act by September 1, 2007.

NEW SECTION.  Sec. 6   A new section is added to chapter 19.112 RCW to read as follows:
     The governor, by executive order, may suspend all or portions of the minimum renewable fuel content requirements in section 2 or 3 of this act, or both, based on a determination that such requirements are temporarily technically or economically infeasible.

NEW SECTION.  Sec. 7   A new section is added to chapter 19.112 RCW to read as follows:
     (1) By November 30, 2008, the director shall determine whether the state's diesel fuel supply is comprised of at least ten percent biodiesel made predominantly from Washington feedstock, and whether the goals of section 2 of this act have been achieved.
     (2) By November 30, 2008, the director shall determine whether the state's gasoline fuel supply is comprised of at least five percent ethanol made predominantly from Washington feedstock, without jeopardizing continued attainment of the federal clean air act's national ambient air quality standard for ozone pollution, and whether the goals of section 3 of this act have been achieved.
     (3) By December 1, 2008, the director shall notify the governor and the legislature of the findings in subsections (1) and (2) of this section.
     (4) If the findings from the director indicate that the goals of section 2 or 3 of this act, or both, have been achieved, then the governor shall issue an executive order declaring that section 2 or 3 of this act, or both, are no longer applicable.

NEW SECTION.  Sec. 8   A new section is added to chapter 19.112 RCW to read as follows:
     (1) If either or both of the goals in sections 2 and 3 of this act are not achieved by November 30, 2008, the director shall monitor the state's diesel and gasoline fuel supply until such time as those goals, or either of them, is met.
     (2) The director shall report to the governor and the legislature November 30th of the year in which a goal is met.
     (3) Following notification under this section that a goal has been met, the governor shall prepare executive request legislation repealing section 2 or 3 of this act, or both, as applicable.

NEW SECTION.  Sec. 9   A new section is added to chapter 19.112 RCW to read as follows:
     For the purposes of sections 2 through 8 of this act, "diesel" means special fuel as defined in RCW 82.38.020, and dyed special fuel as defined in 26 C.F.R. Sec. 48.4082-1T as of October 24, 2005."